New Zealand, 1 September 2020 – In the wake of COVID-19, social and economic disruption has spurred KiwiSaver members to be more engaged with not just their retirement savings, but also how their funds are invested. A new research survey from Mercer shows that nearly three quarters of KiwiSaver members consider access to Responsible Investments (RI) an important feature of KiwiSaver, with women on average nearly 10% more likely than men to switch KiwiSaver providers if their funds are invested in industries they do not support.*
“Investment performance is top of mind for investors across the market, however we found that a growing number of members also want their money invested responsibly and in line with their personal values. Women in particular are more likely to rate access to RI options as one of their top five important features when compared to men” said Sarah Whitelock, Consumer Wealth Leader, Mercer New Zealand.
“Across the board we see women express significantly higher levels of concern about where their funds are invested than men. So much so that women are more likely to switch KiwiSaver providers if their funds are invested in industries they do not support, suggesting investments need to align with their beliefs. Further to that, just over one in five (22%) women are more likely to disagree that their KiwiSaver provider offers a sufficient number of RI options, which tells us there is an opportunity for providers to more clearly demonstrate and communicate their commitment to RI.”
Responsible Investing & performance
“While KiwiSaver members prioritise investment performance, data shows that this doesn’t have to come at the expense of the greater good,” noted Ms Whitelock. “There is often a misconception that targeting responsible or sustainable outcomes comes at the cost of performance, but we are seeing more and more data come out arguing the exact opposite. According to Responsible Investment Association Australasia (RIAA) and Morningstar, RI funds can outperform mainstream funds over a number of time frames and asset classes.”
More recently, the COVID-19 pandemic has highlighted how significant and wide-reaching systemic risk impacts can be. RI strategies - that is, those that more actively factor ESG considerations - outperformed the broader market during this downturn, highlighting RI’s resiliency during a crisis.
Financial markets can no longer be isolated from environmental and social issues. Mercer’s research shows that New Zealanders are incredibly passionate about investing in a way that makes a difference. Many people want to use their investments to support the issues that matter to them, but they may not be sure how to do it.
Ms Whitelock added, “KiwiSaver members have the opportunity to actively invest responsibly and to use their voice as an investor to tell fund managers how well they are doing on environmental and social issues. Fund managers have the power to make a difference through proxy voting and engaging with companies.”
“Funds on the other hand have the obligation to offer investments which are aligned to KiwiSaver member needs and values, but also the greater good,” said Ms Whitelock. “KiwiSaver funds will deliver better, more sustainable returns when they pay close attention to environmental, social and governance issues like climate change, water security, workplace safety and human rights.”
*Online survey methodology among a national random sample (n=1,008) of KiwiSaver scheme members. Survey fielded 30 June to 7 July 2020 by Dynata on behalf of Mercer New Zealand.
The knowledge gap is closing
Most important features of a KiwiSaver Scheme
New Zealanders worry about the industries KiwiSaver schemes invest in
For survey highlights, download the infographic here.
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s more than 25,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a business of Marsh & McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 76,000 colleagues and annual revenue of $17 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.co.nz. Follow Mercer on LinkedIn @Mercer New Zealand.